Codelco raises $1.25 billion in two-part bond sale

Chile’s state-owned copper producer Codelco said on Tuesday it raised $1.25 billion from a two-part US dollar bond sale that it said would underpin its investment program geared at extending the useful life of its mines for 50 years.

The sale comprised two bonds: a new note maturing January 30, 2037, and an expansion of Codelco’s existing 6.30% bonds due September 8, 2053, reported IFR, an LSEG financial service.

Codelco said the transaction closed with spreads of 130 basis points for the 2037 bond, and 132 basis points for the reopening of the 2053 bond, both over US Treasury yields.

S&P Global Ratings assigned a BBB+ rating to both offerings, and estimated the sale would bring in up to $1.5 billion.

Proceeds will be used for general corporate purposes, including paying down existing debt, IFR said.

The company faces free cash flow deficits and reduced copper output.

(By Kylie Madry and Daina Beth Solomon; Editing by Sarah Morland and Natalia Siniawski)